Phil Gramm – The man behind the Bank and Enron “loophole” Deregulation Legislation
http://www.texasobserver.org/article.php?aid=2767&print=true“Maryland law professor Michael Greenberger, a senior official at the Commodity Futures Trading Commission in the late 1990s:
“Gramm has been a central player in two major economic crises—the credit crisis and the incredibly high price of energy… He’s got his fingerprints all over legislative efforts that led to this.”A more notorious feature of the (Bank) modernization act was the “Enron loophole,” which allowed energy trading to escape federal oversight. It was Enron’s electronic trading that led to the California electricity crisis of 2000 and 2001, as well as Enron’s own demise. The Senate Permanent Subcommittee on Investigations has concluded that the loophole contributed to inflated energy prices for American consumers.
Says Greenberger,
“I am quite confident Phil Gramm didn’t understand what his legislation did. It was written by the banks and hedge funds.”Gramm holds fast to his ideology: “I’ve never seen any evidence that opening up competition among banks and insurance companies in any way contributed to this,” he says. And…denies any linkage between the subprime crisis and his deregulatory legislation: “I wouldn’t blame
for the problem. You could make the argument that without them, things would have been worse,” he says.Congress should “look at the lessons of the subprime problem and learn what we can learn…”
“Mimi Swartz recounts in her book, Power Failure, that Gramm exploded to the Los Angeles Times: “As suffer the consequences of their own feckless policies, political leaders in California blame the power companies, deregulation and everyone but themselves,the inevitable call is now being heard for a federal bailout. I intend to do everything in my power to require those who valued environmental extremism and interstate protectionism more than common sense and market freedom to solve their electricity crisis without short circuiting taxpayers in other states.”
“Without Phil Gramm adding that 262-page bill onto an 11,000 page appropriations bill in 2000, it never would have seen the light of day,” Greenberger says.“It was a lame duck Congress...racing off to Christmas recess. It was not an orderly process.”
The vote in the Senate and the House for The Gramm-Leach-Bliley Act which repealed the Glass-Steagall Act along fell along party lines:
(McCain vote in favor)
Congressional Voting Records:
Senate:
http://www.govtrack.us/congress/vote.xpd?vote=s1999-105
House:
http://clerk.house.gov/evs/1999/roll276.xml